Education Plans

Education plans are usually endowment policies. An endowment policy works in a similar way to a Life Assurance policy: you pay a premium every month and an amount is paid out to you at the end of a fixed term (anything from 5-20 years). Your premiums are invested, so the amount you get out will be everything you put in plus any return on your investment. The company you sign with will usually charge you a little for administration of the policy, and this will be added to your monthly premium.

Life Assurance companies are the main source of education plans, though your bank or SACCO may offer an education savings plan or an endowment policy. You should talk to a financial advisor and look around to find the best policy for you. Remember, if the company does not choose its investments wisely, you may not get out as much as you had hoped.